Kelitas Kar Company projects the following costs: Direct material $300,000 Direct labour 500,000 Indirect labour wages 50,000 Sales commissions 30,000 Production foremen salaries 75,000 Production equipment leases 125,000 Production amortization 60,000 Property taxes-plant 25,000 If overhead is allocated on the basis of direct labour hours and 25,000 direct labour hours are budgeted for next year, the estimated overhead allocation rate will be

a) $13.40 per direct labour hours

b) $14.60 per direct labour hours

c) $12.40 per direct labour hours

d) $33.40 per direct labour hours

The answer is A: 13.4. Im having trouble figuring out what goes in to overhead costs.